Last year, the Wall Street Journal reported that McDonald’s was no longer the world’s largest restaurant chain. No longer will McDonald’s and their Big Macs be known as the largest chain. Rather, Subway will bring it’s iconic green and yellow logo and $5 foot-longs to the top of the list and take claim.
While the general public may find it surprising to hear that McDonald’s was overtaken, should one take a closer look at Subway and the strategy they undertook to get where they are today can serve as a great model for franchise restaurants as far as defensibility against other restaurants and expansion strategies.
Knowing is half the battle
In the mid-80’s, the popular phrase “Knowing is half the battle” was coined by G.I. Joe. While G.I. Joe no longer does PSA’s on television, restaurants that stay ‘in the loop’ are the ones that are most likely to succeed.
If you look at some of the top restaurant chains in the United States for example, you will note that one common denominator amongst them all is that they are constantly getting feedback from their customers on ways to improve the service they provide as well as suggestions on future products. Corner Bakery for example is known for their careful attention to detail when it comes to their customer service and making sure that they are providing the highest quality product possible to its 25 million + customers annually.
In the case of Subway, they were able to effectively stave off competitors like Quizno’s by focusing on adding new food products through customer research and market trends.By introducing toasted subs and lowering prices at the appropriate times, Subway was able to capitalize.
Remember, there is always something new to learn about ones customers and market.
Strategic Partnerships & Worldwide Growth
Another factor that helped Subway grow into the number one restaurant chain worldwide was their strategic partnerships and worldwide growth focus.
In an interview with QSR, Subway’s director of development, Don Fertman, discussed the growth of Subway into 10 international markets that it had identified as having high value for expansion. Subway didn’t stop there though. Fertman goes on to say that:
“in our initial reading of top markets we did not include Russia. Right now Russia is up to 75 stores and our developer there has just announced plans to get to more than 1,000 stores by the end of 2015, quite an aggressive goal. But they’re looking at the economics in the market and they can see that Russia is a much bigger market than was originally anticipated.”
Partnerships have also helped Subway grow and expand. For example, it’s not uncommon to find Subway locations paired up with the popular yogurt chain, TCBY. By identifying chains that would compliment the Subway brand, Subway is able to offer a ‘all-in-one’ experience for customers. One should note though that the focus here isn’t to offer a variety of selections. For example, if you are a coffee shop, you shouldn’t start making pizza because you hear that it’s popular.
Key takeaway: Focus on what you’re good at and build partnerships that make sense for your brand and target market.
Are you a franchise owner? If so, what are some things that you as a franchise owner do to do stay competitive with your competition? On the same note, what does corporate do to help position against competitors? Let us know in the comments below.
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4 thoughts on “How Will Your Franchise Restaurants Compete Against Competition?”
One characteristic (a feeling imparted to our family) that Subway seems to have when compared to many other food chains is that the food there will be healthier for us (even if I choose to get the less healthier options 😉 ). Also, you can generally count on them to at a location near you… which is convenient.
It’s ironic how much money is spent annually by subway on advertising and this recent effort by Don Fertman to promote Subways image. I say ironic because here in Pakistan, we are being served everything from Caterpillars, Flies to Cockroaches in our Subs. The outlets have pathetic hygiene conditions with servers picking their nose in front of customers, clipping their nails on counters and cockroaches coming out of their kitchens if it wasnt enough to make you throw up in your mouth already.
There are no checks and balances because the Development Agents are the very people who own majority of the franchises. Convenient, because you cant get your complaint heard or an impartial resolution.
Customers come down with food borne illnesses such as food poisoning, hepatitis, typhoid. I loved Subway, I still do. But I’m a little repulsed now. I had been eating for 3 months straight at Subway store id 39526. There were flies and the insect killers didnt work. I politely filled out a suggestion card and also asked the server to tell the owner to do something about the insect killer.
Next visit, nothing had happened. So I decided to take snaps of the dead and alive flies on the premises and email them to him. As I did so, a server on the counter started clipping his nails since there were no customers to serve at the time. A few days earlier, a server had picked his nose oblivious to on looking customers. I reprimanded him, he apologized and I let it slide thinking it was a one off incident. Keep in mind, we are brain washed by the clever advertising into thinking regardless of geographical location. Subway would maintain its standards of hygiene at least. Not so.
As I was done finishing the email, a large cockroach came out of the kitchen making me want to throw up. I stopped going to Subway after that but it was already too late. I came down with Hepatitis A and was in the hospital for 2 weeks of what seemed like a near death experience.
2 months passed and the owner still didnt reply. I called Subway HQ and threatened a lawsuit. I was given nothing but lip service by their attorney “We will look into this but can’t promise you a time frame for a resolution as we have never dealt with such a situation before’. Add insult to injury why dont you? The owner emailed me saying the workforce was to blame, and took no responsibility for the incident.
These are the kind of people you want representing Subway Don Fertman? The kind that play with peoples lives and safety? Why? Because its good for profits and business? Have you any idea how many customers you lose when this happens? I’m looking at a relapse of the Hepatitis A and Subway International wants to do nothing about it because business is good so far in this part of the World.
I think it’s critical for local restaurants to build relationships in their community. Because local independent restaurants usually maintain the same ownership they can reach out to schools, sports teams and companies to partner with them.
People love to eat and be recognized by name. Get to know your customers by name.
True that Pete. Customers love to be recognized and feel special